Tuesday, January 07, 2014

Bumble Bee pushes the envelope, finds lawsuit inside

I’m trying to do less food claim blogging, but I noted this
case because of the summary judgment submissions, which contain interesting
evidence about food marketing practices generally.

Ogden sued Bumble Bee, alleging the usual California claims,
over representations related to several tuna/sardine products it sold.She alleged that Bumble Bee made unlawful
nutrient content claims about the presence of Omega-3 fatty acids, contrary to
the FDCA and FDA regulations as adopted by California law.The products claimed to be an “excellent
source” of or “rich in” Omega-3, but the FDA hasn’t established a reference
daily intake/value for Omega-3 as required for such claims. Ogden testified
that she read and relied on the statements, and that she paid more for the
products than she otherwise would because of them. She further alleged that the
statements were unlawful because they weren’t accompanied by disclosures about
the products’ high levels of fat or cholesterol, as required for such products
making nutrient claims. Though Ogden doesn’t normally read detailed nutrition
information panels, she testified that she bought the products because of the
Omega-3 claims and that she wouldn’t have done so if she’d known about the high
levels of fat or cholesterol. Ogden also challenged various vitamin A and iron
nutrient content claims made on the relevant Bumble Bee website, but she didn’t
visit that site before buying.(She also
challenged the heart symbol on the label of one of the products as an unlawful
health/disease treatment claim.)

As is now required, we start with standing.Bumble Bee argued that Ogden didn’t show a
genuine factual issue about whether she bought any Bumble Bee products “as a
result of any false or misleading statement” by Bumble Bee. (Why this is a standing issue and not a merits
issue …)Standing requires reliance on
the defendant’s alleged misrepresentations and resulting injury.The reliance requirement applies also to
“unfairness” claims predicated on misrepresentations.Ogden had indeed created a material issue
with her testimony.

Bumble Bee argued that Ogden couldn’t show reliance on a
misrepresentation because its claims were authorized by federal law.The FDCA allows manufacturers to petition the
FDA for permission to use new nutrient content claims.If the FDA doesn’t object within 120 days,
it’s deemed authorized at least until the FDA issues a superseding regulation
(or a district court rules against the manufacturer in an enforcement
proceeding).In 2005, a different
seafood manufacturer sought permission to use an “excellent source”/“high
in”/“rich in” Omega-3 claim, and the FDA didn’t object within 120 days.Though it issued a proposed rule that
would’ve declared this claim unlawful, the proposed rule never took effect, so
it remains authorized.

This other notification didn’t render Bumble Bee’s
statements lawful.The language was
materially different from Bumble Bee’s own statements, identifying the specific
type of Omega-3 fatty acids present, as Bumble Bee did not.The language of the law itself required
notification about the “exact words” to be used in the claim. And, the court
pointed out, if the Omega-3 statements weren’t authorized by FDA regulations,
then they shouldn’t have appeared on the product labels at all, since they’re
nutrient content claims. “Although the Court does not conclude, at this point,
that Bumble Bee’s Omega–3 statements were unlawful, the Court notes that Bumble
Bee has not identified, and the Court has not found, any other statute,
regulation, or governing authority that indicates that Bumble Bee’s Omega–3
statements complied with federal and state labeling requirements.”(Yikes!)

As for claims based on Bumble Bee’s failure to accompany the
Omega-3 statements with a front-of-package fat/cholesterol disclosure, Ogden’s
concession that she doesn’t ordinarily read detailed nutrition information wasn’t
dispositive.She testified that she
understood the Omega-3 statements to mean that the products were heart-healthy
and that she wouldn’t have bought the products had she known the truth given
her concerns over high levels of fat and cholesterol.Thus, a jury could reasonably infer that she
would’ve read front of package disclosures and thus suffered an injury from their
absence.In fact, “the inference that
favors Ogden may even be stronger than the inference that favors Bumble Bee,”
since the whole point of the front-of-package disclosure requirements “appears
to be to give consumers extra encouragement to read the nutrition panel” and
the FDA clearly regards such disclosures as “critical” in informing consumers.

Bumble Bee also argued that “consumers in general are
indifferent to nutrition information on a food product’s packaging.”This, the court noted, went to the substance
of the claim that Bumble Bee’s conduct was likely to deceive reasonable
consumers, not to standing, but anyway it’s generally a factual issue.The court cited testimony from a Bumble Bee
marketing rep acknowledging that Bumble Bee views statements on the front of
its labels as important, as well as a Bumble Bee VP who stated in meeting
minutes that “[m]y suggestion [for label statements regarding Omega–3s] is to
push the envelope as FDA doesn’t have a track record of challenging anything.”This was enough to preclude reliance on
Bumble Bee’s expert report concluding that consumers do not care about fat or
cholesterol content in deciding whether to purchase canned seafood.

However, the vitamin A and iron nutrient content claims were
rejected because they only related to statements on the website, and Ogden
neither proved that the statements were actually made by providing evidence of
what the website said nor testified that she relied on the website before
purchase.The same was true for the
health claims, except for that based on the heart symbol on the Bumble Bee tuna
in water.But there, she failed to
explain why the heart symbol was unlawful.

The court rejected other arguments that reduced to FDA
preemption, which doesn’t exist because California’s law here is identical and
Ogden was enforcing California law.However, the court found that Ogden wasn’t entitled to restitution or
disgorgement because she didn’t offer evidence to prove the difference between
what she paid and the value of what she received.Finally, her injunctive relief claims
survived because, while Bumble Bee was “in the process” of revising the labels,
there was no evidence of the timing or content of that change, so injunctive
relief might still be appropriate.

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